Market: Jersey City Heights, NJ
Strategy: Renovate / Re-tennant
Located on a corner in the Heights neighborhood of Jersey City, the property included multifamily apartments above ground floor commercial space. The property was mismanaged with deferred maintenance and under-rented units that weren’t renovated since the early 1980s. C6 executed a significant capex plan and brought the building to code. The initial capex plan included replacing electrical systems, boilers, roof, upgrading all fire escapes, re-pouring the basement ground floor, installing new fire and security systems and renovating the common areas.
Following the initial capex plan, C6 began a unit-by-unit renovation of the apartments which included new flooring, kitchens, bathrooms, and other upgrades. Apartment renovations resulted in approximately 40% increase in rents while also maximizing parking revenue. C6 negotiated a blend and extend lease renewal with annual increases from the ground floor commercial tenant to fully stabilize the building and prepare for a sale.
The investment was capitalized through a joint venture structure with C6 and a private family office. The property was sold in October 2017 to a core buyer. Held for less than three years and with cash flow since inception, the investment achieved a 15% IRR and 1.4x multiple to investors.